India's Revised CBG Pricing Framework Seeks Balance Between Producer Viability and Consumer Affordability

The Indian Ministry of Petroleum and Natural Gas has clarified its revised pricing framework for Compressed Biogas (CBG) under the GOBARdhan Scheme, stating that it will provide a stable price to producers while keeping the impact on consumers negligible.

According to the ministry, the higher procurement price for CBG would not translate into a similar increase for CNG and household PNG consumers due to government-funded affordability support and a wider gas pool.

The revised framework fixes the CBG price at Rs 2,110 per million British thermal units (MMBtu), an increase of about 43% from the existing system. However, this is the procurement price paid to producers, not the price directly paid by consumers.

With government support of Rs 10 per kg of CBG, equivalent to around Rs 215 per MMBtu for CBG with 95% methane content, the effective CBG cost to be recovered through gas consumers would be around Rs 1,895 per MMBtu, or about 28% higher than the prevailing price.

The ministry stated that the full revised price would not be recovered from consumers and that CBG is pooled with other domestically produced natural gas. The net cost of CBG will be spread across a domestic gas base 2.5 to 3 times larger than the earlier base, protecting consumers from any material price impact.